Earnings call transcript: Medtronic Q1 2025 sees earnings beat, stock drops

Medtronic PLC, a prominent player in the Healthcare Equipment & Supplies industry with a market capitalization of $118.65 billion, reported its first-quarter fiscal 2026 earnings, surpassing Wall Street expectations with an adjusted earnings per share (EPS) of $1.26, compared to the forecasted $1.23. Revenue also exceeded projections, reaching €8.6 billion against an anticipated €8.38 billion. Despite the earnings beat, Medtronic’s stock fell 5.22% in premarket trading, closing at $87.97, down from its last close of $92.81. According to InvestingPro analysis, the company maintains a GOOD financial health score of 2.82, supported by strong cash flows and consistent dividend payments.

Key Takeaways

• Medtronic’s EPS surpassed forecasts by 2.44%.
• Revenue increased to €8.6 billion, exceeding expectations.
• Stock price fell 5.22% in premarket trading.
• Raised full-year EPS guidance to $5.60-$5.66.
• Strong growth in Cardiac Ablation and Diabetes segments.

Company Performance

Medtronic demonstrated robust performance in Q1 FY2026, with key segments such as Cardiac Ablation Solutions and Diabetes showing significant growth. The company’s strategic focus on innovation and operational efficiencies is evident, as it prepares for new product launches and market expansions. Compared to the same quarter last year, Medtronic’s organic revenue grew by 4.8%, although the adjusted gross margin saw a slight decline.

Financial Highlights

• Revenue: €8.6 billion, up 4.8% year-over-year.
• Earnings per share: $1.26, exceeding forecasts by $0.03.
• Adjusted gross margin: 65.1%, down 80 basis points from the previous year.

Earnings vs. Forecast

Medtronic’s Q1 results exceeded analyst expectations, with a revenue surprise of 2.63% and an EPS surprise of 2.44%. This marks a positive deviation from the company’s historical trend, where earnings often align closely with forecasts. The magnitude of this beat is notable, reflecting Medtronic’s effective cost management and strategic growth initiatives.

Market Reaction

Despite the positive earnings surprise, Medtronic’s stock fell by 5.22% in premarket trading. The stock’s decline contrasts with its 52-week high of $96.25, indicating investor concerns despite strong financial performance. InvestingPro data shows the company trading at a P/E ratio of 25.63, which appears reasonable given its growth prospects and stable 3.06% dividend yield. The company has maintained dividend payments for 49 consecutive years, demonstrating remarkable financial stability. Get access to 8 more exclusive InvestingPro Tips and comprehensive valuation metrics with an InvestingPro subscription.

Outlook & Guidance

Medtronic raised its full-year EPS guidance to a range of $5.60-$5.66, signaling confidence in sustained growth. The company anticipates revenue growth acceleration in the latter half of FY2026, driven by upcoming product launches such as the Hugo robotic surgical system and new continuous glucose monitoring (CGM) sensors. With a revenue growth of 3.62% in the last twelve months and strong cash flows to cover interest payments, Medtronic’s strategic focus on innovation and market expansion positions it well for future growth. Discover deeper insights into Medtronic’s growth potential with InvestingPro’s exclusive Pro Research Report, part of our coverage of 1,400+ top US stocks.

Executive Commentary

CEO Jeff Martha highlighted Medtronic’s transition into a period of greater revenue and earnings growth, emphasizing the role of innovation in driving this transformation. "We’re creating an environment at Medtronic where innovation fuels growth and growth in turn creates the oxygen needed to fuel more high ROI investments," Martha stated, underscoring the company’s commitment to high-return investments.

Risks and Challenges

• Supply chain disruptions could affect product availability and costs.
• Market saturation in certain segments may limit growth potential.
• Regulatory hurdles for new product launches could delay market entry.
• Macroeconomic pressures, such as inflation, might impact operational costs.
• Competitive pressures, particularly in the CGM market, could affect market share.

Q&A

During the earnings call, analysts focused on Medtronic’s growth drivers and strategic initiatives. Key questions addressed the company’s preparedness for the renal denervation market and its plans for international expansion of the robotics segment. Executives expressed confidence in the company’s growth trajectory and highlighted ongoing investments in high-growth areas.

Full transcript - Medtronic PLC (MDT) Q1 2026:

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Hello, everyone, and thanks for joining us today for our fiscal twenty twenty six first quarter video earnings webcast. I’m Ryan Weisvening, Vice President and Head of Medtronic Investor Relations. Joining me here today are Jeff Martha, Chairman and Chief Executive Officer and Thorey Peyton, Chief Financial Officer. Jeff and Thorey will provide comments on the results of our first quarter, which ended on 07/25/2025 and our outlook for the remainder of fiscal year 2026. After our prepared remarks, we’ll take questions from the sell side analysts that cover the company.

Today’s program should last about an hour. Earlier this morning, we issued a press release discussing our results and containing several financial schedules. We also posted an earnings presentation that provides additional details on our performance. The presentation can be accessed in our earnings press release or on our website at investorrelations.medtronic.com. During today’s program, many of the statements we make may be considered forward looking statements and actual results may differ materially from those projected in any forward looking statement.

Additional information concerning factors that could cause our actual results to differ is contained in our periodic reports and other filings that we make with the SEC and we do not undertake to update any forward looking statement. Unless we say otherwise, all comparisons are on a year over year basis and revenue comparisons are made on an organic basis, which excludes the impact of foreign currency and first quarter revenue in the current and prior year reported as other. References to sequential revenue changes compared to the 2025 and are made on an as reported basis. All share references are on a revenue and year over year basis and compare our first fiscal quarter to our competitors’ second calendar quarter. Reconciliations of all non GAAP financial measures can be found in our earnings press release or on our website at investorrelations.medtronic.com.

And finally, our EPS guidance does not include any charges or gains that would be reported as non GAAP adjustments to earnings during the fiscal year. With that, over to you, Jeff.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Alright. Thanks, Ryan, and hello, everybody. Welcome to the call. Welcome to the new look. And as you’ve seen from our press releases, we have a lot to talk about today.

So why don’t we just jump in and I’ll I’ll get going on our q one results here. So we started the fiscal year by delivering another consistent quarter of mid single digit revenue growth. And look, we remain confident in our ability to accelerate growth as we move through fiscal twenty six. Our top line growth for the quarter was in line with our guidance and EPS came in ahead of guidance. Look, the entire organization is working with laser focus to execute on the incredible set of opportunities Medtronic has in front of us.

And we’re pleased to be able to raise our EPS guidance for the full year on the back of this strong start of the year. And as you’re gonna hear today, Medtronic is we’re at the forefront of med tech innovation across product categories, and we’re on the cusp of an acceleration in our financial results and our strategy. So let me take you through some key portfolio highlights before I turn the call over to Thierry, who’s gonna walk through the results across all of our businesses. So I’m gonna start with cardiovascular, which grew high single digits again this quarter, and that’s off a high single digit comparison in the prior year. And this is driven by our innovative product portfolio and a relentless execution in what is a core right to win area of the market for us.

We achieved double digit growth in cardiac surgery, in ICDs, and in leadless pacing. And critically, we reached nearly 50% growth in cardiac ablation solutions on the rollout of our PFA systems. This performance is reflective of our execution capabilities and we’re excited that our growth momentum in this pivotal area is only really just beginning. Look, this past quarter I’ve witnessed Afera and our competitors in action in several ablation cases. And I can tell you firsthand that the advantages that we’re bringing to the market in terms of procedure time and ease of use are truly differentiated.

Physician feedback and utilization levels of our equipment are phenomenal. And we have more conviction than ever that we have the right technology and the product pipeline to catapult us to category leadership in cardiac ablation. Now in neuroscience, we grew 3% supported by high single digit growth in both neurosurgery and neuromodulation. Look, as I mentioned last quarter, our spine Able ecosystem is driving differentiated share gains as health systems, they’re not just updating one piece of capital equipment when they upgrade. They’re upgrading to the full Able ecosystem, which is is a powerful thing for us and creates a real moat, a competitive moat around that business.

In neuromod, our innovative closed loop sensing technology in both pain stim and brain modulation, combined with our strong commercial execution, is also winning share. That said, our neuroscience growth was a bit below trend due to our specialties therapies businesses, which was the result of some deliberate changes we’ll discuss in a few moments. But we expect to improve starting in q two and further accelerate in the back half of the fiscal year. Switching to MedSurg. MedSurg grew 2% this quarter, in line with our current expectations.

And diabetes continue to grow above the company average on the strength of our seven eighty g system and Simplera Sync Sensor in international markets. So looking ahead, we’re well positioned to accelerate growth in each of our segments in the second half of the year. In our earnings deck that we posted earlier today, we outlined several milestones that we have coming over the rest of the fiscal year that will drive this acceleration. The largest, of course, being our cast business with our continued rollout of our PFA portfolio. In q two, we expect our cast business to grow even faster than the nearly 50% growth we posted this past quarter, and we continue to have near term line of sight to adding an incremental $1,000,000,000 in revenue off of our fiscal twenty five base.

Demand remains extremely high, and we’re executing against our plans to quickly ramp mapping system and catheter supply. And CAS is is just one of several upcoming growth accelerators for cardiovascular. Let’s talk renal denervation. We’re expecting the final national coverage from CMS on our on or before October 8, and we expect The US launch of our simplicity procedure for hypertension to ramp after that. And our peripheral vascular business will start the launch of our Contigo Carotid Stent System this quarter and our Liberant Mechanical Thrombectomy System in the second half of the fiscal year.

Now in neuroscience, we’re poised to accelerate growth starting this quarter, with further acceleration in the back half of the fiscal year. First, we expect our Pelvic Health business to be a key driver for this segment in fiscal twenty six and beyond. Importantly, ahead of our tibial launch this fall, we took the opportunity to make some significant changes to our commercial organization in pelvic health in q one. Now while this had some short term impact in the quarter as we expected, it sets us up. It sets us up to capitalize on the large opportunity ahead as we anticipate accelerating growth from this business as we go through the year.

In Neurovascular, we expect growth to accelerate each quarter as we go through the remainder of the fiscal year and as we lap China VBP and product recall comps. And we also have some new products ramping in carotid stenting and our, hemorrhagic portfolio. Now in surgical, we have The US launch for Hugo in the back half of the fiscal year, which we expect to be accretive to growth. And in diabetes, we expect performance to accelerate as we launch two new sensors, Simplera Sync this fall and the Abbott based sensor, which we’re calling Instinct, in the coming months. Simplera is half the size of our current sensor.

It’s disposable, and it’s much easier to put on with with no over tape. And with Instinct, our customers will get access to Abbott’s most advanced CGM platform. And when you combine these these improved sensors with our MiniMed seven eighty g and its exclusive meal detection technology, we expect to see a positive inflection in our installed base and revenue growth. As for the separation of our diabetes business, MiniMed, we’re calling it, is proceeding according to plan. MiniMed is entering a strong innovation cycle in its own right.

The separation will will sharpen Medtronic’s focus on our core businesses, including high growth opportunities like like we discussed, PFA and Ardian and others. And it will also allow Medtronic to grow revenue and earnings faster without diabetes than we do with it today. We continue to expect the separation to be immediately EPS accretive even with conservative valuations, and this portfolio move will will be a value creating separation for Medtronic shareholders. Clearly, look, there’s a lot to be excited about at Medtronic in the next few quarters. And as a result of the the strength of our product pipeline, we’re confident that not only will our revenue growth inflect in the near term, but we’ll also achieve higher earnings growth over time.

This will come through a combination of natural p and l leverage and decisive urgent action we’re taking to improve efficiency in both COGS and our operating expenses. We’re creating an environment at Medtronic where innovation fuels growth and growth in turn creates the oxygen needed to fuel more high ROI investments in into innovation. We’ve already started increasing these investments as you saw this quarter with our high single digit increase in r and d. And it is these investments that will make our earnings power durable. Now with that, I’ll turn it over to Thierry who’s gonna cover the details of our business performance, our financials, and of course, guidance.

So over to you, Thierry.

Thierry Peyton, Chief Financial Officer, Medtronic: Hey. Thanks, Jeff, and, hello, everyone. So I’ll start first with our cardiovascular portfolio. So CV grew 7% this quarter, led by Cardiac Ablation Solutions. CAS growth continued to accelerate to nearly 50%, including low 70s growth in both The U.

S. And Japan and low 30s growth in international markets. This rapid growth is being driven by high demand for our Pulse Field Ablation systems, including our Pulse Select anatomical catheter and especially our Sphere nine focal catheter and a Ferra mapping system. A Ferra mapping system utilization is high, and the Sphere nine catheters are being used in a wide variety of cases. Our teams are quickly ramping supply, and our Mapper hiring is on track.

This is allowing us to enter new accounts as well as going deeper into more labs in our established accounts. We’re still early in the rollout, and we continue to execute with urgency to capitalize on this massive opportunity. We expect to continue to win share in this €11,000,000,000 space that is now growing over 25%. As we look forward, we’re advancing our PFA pipeline, including our next gen Afera SPHER3 60 catheter. We hear from many EPs that SPHER3-sixty is the most anticipated single shot catheter in this space, driven by very positive early clinical data.

We’re expecting to start the pivotal trial for SPHERIA360 this calendar year. Next, in Structural Heart, we grew 6%. We continue to gain traction with our Evolut FX and TAVR device and our differentiated clinical evidence. We’re getting our fair share of international revenue from Boston Scientific’s market exit. We’re also gaining momentum in several geographies, including Japan.

We expect all of this to drive continued strength in our TAVR franchise in the quarters ahead. In Cardiac Rhythm Management, we grew 3% with 6% growth in Defibrillation Solutions and 3% in Cardiac Pacing Therapies, offset by Cardiovascular Diagnostics. We continue to see strong adoption of our premium innovative products, including 83% growth of AURORA EV ICD, 14% growth in Micra leadless pacemakers and 21 growth with our 3,830 conduction system pacing lead. In hypertension, we were very pleased with CMS’ proposed NCD for our SIMPLICITY system that they issued last month as well as the positive comments that came in during the public comment period. And then last week, we received the news that the ACC and issued updated guidelines recognizing Ardian as a treatment option for hypertension.

These are very important steps to providing patients access to our innovative SIMPLICITY procedure. Nearly half of U. S. Adults have hypertension and one in four are uncontrolled despite the broad availability of numerous generic drugs. CMS now expects to finalize the NCD on or before October 8, and we expect procedures to ramp following that.

Ahead of this, we’re working with health care systems across The U. S. To train physicians and help them establish Simplicity service lines. We’re rapidly hiring clinical specialists and market development and health care economics managers to drive the future growth. They will work alongside our existing coronary sales force to provide support for this important new treatment.

We also continue to invest in next gen Ardient technology, including our next gen catheter that will provide radial access. And we enrolled our first patient in our multi organ denervation pilot study, which is called Spiral Gemini. Now turning to the neuroscience business, which grew 3%. Our Cranial and Spinal Technologies business grew mid single digits, including 5% U. S.

Core spine growth and 8% U. S. Neurosurgery growth. As Jeff mentioned, we had a strong capital equipment quarter as our differentiated Able Spine ecosystem continues to win share. Several categories of our enabling equipment grew double digit globally, including Mazor, O Arm, Midas Rex and StealthStation.

In neuromodulation, we had another very strong quarter, growing 9%. In PainStim, we grew 10% globally, including 11% in The U. S. Our Inceptive system, with its responsive real time therapy adjustments, is giving patients greater freedom. And in brain modulation, we grew high single digits as our groundbreaking BrainSense adaptive DBS technology is launching in The U.

S, Europe and Japan. BrainSense is a fully closed loop brain computer interface that automatically provides personalized, real time therapy adjustments based on brain activity feedback for patients with Parkinson’s disease. Next, turning to our MedSurg portfolio, which grew 2%. Our Surgical business also grew 2% this quarter. The business had high single digit growth in Advanced Energy, where our market leading LigaSure vessel sealing technology won share again for the twelfth quarter in a row.

This, combined with high single digit growth in emerging markets, helped offset two ongoing but stable market pressures: One is in bariatric surgery and the other is from the shift to robotic surgery, and both are primarily in The U. S. We continue to expect our surgical growth to improve over time, starting in the back half of the fiscal year as we begin to expand the launch of HUGO. Earlier this calendar year, we filed for FDA approval for HUGO, and we’re looking forward to launching it in the important U. S.

Market. In international markets, we’re making good progress in Surgical Robotics as our revenue and procedure volumes continue to grow. Last month, we received CE Mark for Legoshor Technology on HUGO. This was an important step for our robotic offering given that LigaSure is the most preferred vessel sealing technology in the world, having been used over 35,000,000 procedures. Robotics and the ecosystems that robotic assisted surgery enables are important for our Surgical business.

And as we look ahead, we see robotics and our world class digital and AI capabilities as an important strategic differentiator that will benefit many of our franchises at Medtronic. To wrap up our business performance. In diabetes, we grew 8%. This included 11% growth in international markets, where our Simplera sensor technology is already available. We’ve heavily invested in diabetes over the past few years.

And now we’re entering a strong innovation cycle with both new technology and new indications. Last month, we received CE Mark for expanded indications for the seven ATG for type two diabetes, children as young as two and during pregnancy. Looking ahead, in addition to launching the two new sensors that Jeff mentioned, we’re expecting type two approval in The U. S. In the coming months.

And we also continue to make progress with our new insulin pump systems. We intend to submit our next generation durable pump, the MiniMed Flex, to the U. S. FDA by the end of the fiscal year. Flex is much smaller than seven eighty gs as the screen is your phone, allowing for more discrete placement while still using the same reservoirs and infusion sets.

And Flex will work with both SimpleraSync and Instinct sensors. Finally, as mentioned, our planned separation of Minimal is on track. Our preferred path continues to be a two step IPO and split, which we expect to have fully completed within fifteen months from now. Upon separation, we continue to expect approximately 50 basis points of growth margin improvement and 100 basis points of operating margin improvement. Now turning to the financials.

Q1 revenue of €8,600,000,000 grew 8.4% reported and 4.8% organic, in line with our guidance. Our adjusted gross margin was 65.1%, down 80 basis points year over year. This was expected and stable when compared to Q4. I’ll walk you through the four main components that drove the gross margin this quarter. First, we continue to benefit from pricing as we launch new products and maintain pricing discipline on contracting, and this had a 30 basis points benefit.

Second, business mix, as I noted last quarter, continues to be a near term headwind, approximately 70 basis points this quarter, split roughly equally between CAS and Diabetes. CAS today is impacted by the mix of lower margin capital to higher margin catheters, and diabetes is early in its manufacturing ramp of the Simplera sensor. Over time, we expect both of these to improve as we scale our CAS business and separate the diabetes business. Third, our COGS efficiency programs, net of inflation, continue to benefit gross margin as our global operations and supply chain organization execute to deliver savings on materials and drive efficiencies in our manufacturing plants. This quarter, this was more than offset primarily by the manufacturing ramp of Afera that we incurred last year.

The net of these items was a 50 basis points headwind. And finally, foreign exchange was 10 basis points tailwind to gross margin. Moving down the P and L. Adjusted R and D was up 7.7%, 100 basis points ahead of revenue growth. We’re allocating significant capital to high growth projects across our businesses, including large increases in both cardiovascular and diabetes.

With SG and A, we continued to drive leverage, growing at 170 basis points below revenue growth. Importantly, we drove the significant leverage while also increasing investment in growth areas, including CAS as we hired more mappers and Ardian as we develop the market. We are extremely focused on making sure we fuel our growth drivers to maximize the opportunities from these technological breakthroughs. Our adjusted operating profit was €2,000,000,000 resulting in an adjusted operating margin of 23.6%. Below the operating profit line, our adjusted tax rate was 17.8%, about 70 basis points better than expectations due to a jurisdictional mix of profits.

The FX impact on EPS was neutral in the first quarter, a couple of cents better than anticipated given rate movements throughout the quarter. The net result was adjusted EPS of one point two six zero point three above the midpoint of our guidance. Now let’s move to our guidance. On the top line, we continue to expect fiscal year twenty twenty six organic revenue growth of approximately 5%. In Q2, we’re expecting 4.5% to 5% organic growth, similar to what we just delivered in the first quarter.

As Jeff covered earlier, we’re expecting revenue growth to accelerate in the back half of the fiscal year. Based on recent FX rates, which have moved substantially over the past quarter, we now see a tailwind of revenue of $550,000,000 to $650,000,000 in fiscal twenty twenty six. This is over $05,000,000,000 positive increase versus three months ago. In Q2, FX is currently a $50,000,000 to $100,000,000 tailwind based on the recent rates. Moving down the P and L, we’re continuing to drive pricing discipline and to deliver savings on our COGS efficiency programs.

These will be offset in the near term by continued business mix, primarily in CAS and Diabetes. Regarding tariffs, you’ll recall we outlined two scenarios when we gave our annual guidance last quarter. Given where we are in the year, we can take the worst case three fifty million scenario off the table for this year. And the 200,000,000 scenario has modestly improved driven by our execution on mitigation efforts. As a result, tariffs are now expected to be approximately €185,000,000 for fiscal twenty twenty six.

We also remain committed to increase investment in our current and future growth drivers, resulting in increased R and D and sales and marketing spend. At the same time, we are confident in our ability to drive leverage with our G and A expenses. Accordingly, there is no change in our expectation for fiscal twenty twenty six operating profit to grow materially faster than revenue. Given our Q1 results, we’re raising our underlying fiscal twenty twenty six EPS growth expectation, which excludes the impact of tariffs, to 4.5% versus the prior 4%. FX is now a flat to 1% benefit to fiscal twenty twenty six EPS.

Including the impact of tariffs, we’re now guiding EPS in the range of $5.6 to 5.66 a raise from our prior range of 5.5 to $5.6 For Q2, we would expect EPS of $1.3 to $1.32 which includes an approximate 1% benefit from foreign currency based on recent rates as well as an approximate EUR 18,000,000 negative impact coming from tariffs. As I mentioned last quarter, we’re expecting high single digit EPS growth in fiscal year twenty twenty seven, driven by accelerating revenue growth, improved business mix from CAFs and diabetes as well as the other financial benefit of the diabetes separation. To conclude, our confidence is building. We’re advancing our growth drivers to accelerate revenue and growth, and we’re executing on efficiencies in manufacturing and supply chain and operating expenses to drive earnings growth. At the same time, we’re increasing our growth investments in R and D and sales and marketing, all with a deliberate focus on creating long term shareholder value.

Jeff, back to you.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Okay. Thank you, Thierry. And before we go to Q and A, I want to make a few brief remarks on the shareholder value creation initiatives we announced this morning in partnership with Elliott Management and on the opportunity that we both see ahead for Medtronic. Today, we’ve announced a series of governance enhancements that will help capitalize on the enormous opportunities in front of us and unlock the full extent of Medtronic’s potential. To start, we’ve appointed two new independent board members, John Grodilars and Bill Jelison, each of whom bring deep operational expertise in medtech and fresh perspectives to the table.

The board and I are excited to welcome both John and Bill to Medtronic. And as part of our inflection, the leadership and I are reinvigorating our laser focus up and down the organization on two key fronts: growth and creating oxygen to fuel that growth and drive earnings power. These two focus areas need to be linked from the frontline employees of Medtronic up through senior leadership, including me, and all the way to the board. So today we announced that we’ve created two new board committees to support management. The growth committee, which will oversee our portfolio management and capital allocation decisions to accelerate growth, and an operating committee, which will provide oversight of our efforts to drive efficiency gains in our operations and expense base.

This will enable a higher level of organic investment back into our business while also delivering improving margins and accelerating EPS growth. So we’ll have a fresh perspective from our two new board members, and these two committees will give us support and focus so we can execute with both speed and urgency. And finally, we look forward to sharing the culmination of these initiatives at an Investor Day sometime mid calendar ’26. And at this event, we intend to provide a comprehensive update for investors on our strategy post diabetes, the value proposition of our go forward portfolio, and new long term financial targets for sustained value creation. So to conclude, here’s what we want you to take away from today’s announcement with Elliot.

Medtronic is turning the page and will be entering a new period of greater revenue and earnings growth. We’ve put in place a stronger foundation for the company. And over the last few quarters, we’ve discussed how we have an incredible product pipeline that is poised to accelerate our organic growth. And now with our renewed focus on aligning our portfolio and capital allocation for higher growth, as well as enhancing operational excellence, we’re putting the pieces together in place to translate that accelerating top line into a period of sustained, outsized earnings growth. We’re entering a new phase of our transformation to act more boldly and more decisively to deliver the strategic clarity, growth profile, operational rigor, investment strategy, and shareholder returns that this company is capable of.

And as I wrap up, I want to thank the Medtronic employees watching today. We’ve gone through a lot of change together to better position the company to deliver improved performance. I appreciate that you’ve accomplished this while also keeping the Medtronic mission front and center. You’re striving without reserve for the greatest possible reliability and quality in our products, and you’re doing so with dedication, honesty, integrity, and service. Your work is benefiting millions of patients around the world as we alleviate their pain, as we restore their health, and we extend their lives.

So thank you. Okay, now it’s time to move on to Q and A where we’re going to try to get to as many of you analysts as possible. So we ask that you limit yourself to just one question and only if needed a related follow-up. If you have additional questions, you can reach out to Ryan and the Investor Relations team after the call. So Ryan, can you please queue up the Q and A instructions?

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Sure, Jeff. For the sell side analysts that would like to ask a question, please select the Participants button and click Raise Hand. If you’re using the mobile app, press the More button and select Raise Hand. Your lines are currently on mute and when called upon, you will receive a request to unmute your line, which you must respond to before asking your question. Finally, please be advised that this Q and A session is being recorded.

We’ll pause for a few seconds now to assemble the queue. Okay. We’ll take the first question from Travis Steed of BofA Securities. Please go ahead, Travis.

Travis Steed, Analyst, BofA Securities: Hey, thanks for taking the question. I guess, first of all, on the pipeline, I see it’s coming through this quarter, CAS, 72% U. S. Growth. It sounds like supply is ramping up nicely there.

So love an update on CAS, but also it’s not showing up in the total U. S. Growth. U. S.

Growth, 3.5% this quarter, 1% structural heart growth. I guess just want to hear your confidence, like you talked about being confident in the ability to accelerate growth over FY 2026, but how do you get confidence in kind of the base business still kind of growing mid single digits so that the pipeline can kind of be on top of that?

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Sure. Yes. Thanks for the question, Travis. Look, let me start with just some context on the quarter. Like I said, we another mid single digit quarter, 4.8% organic revenue growth coming in within our guidance of 4.5% to five, EPS coming in 3¢ above the midpoint.

To your point, the growth drivers are accelerating. You highlighted CAS, I’ll come back to that. And we got other ones coming, you know, already, and we talked about the tibial coming in the back half of the year. You know, and you you there are a couple of areas that came in, you know, a little below trend, you know, like in neuroscience, for example, pelvic health, neurovascular, and then, you know, we’ll get to diabetes. Demand is strong there, but The US growth came down a bit.

So there are a couple areas, and I’ll turn those over to Thierry in a second, that are going to be kind of bouncing back and accelerating. And then on the and that’ll impact The US, but also on The US growth, a lot all the new technology that’s coming, you know, the continued acceleration in CAS, Ardian, like I mentioned, diabetes, pelvic health, plus the rebound of these, they’re all will have an outsized impact on The U. S. Growth. I mean, Thierry, you want to talk about the

Thierry Peyton, Chief Financial Officer, Medtronic: No, I think you hit the main points. As you said, some of the pieces of the business that had a relatively slower growth in the first quarter were mostly U. S. So if you take a couple of these examples in Pelvic Health, we made some changes in the commercial force, as we said in the commentary, to prepare for the launch of Tibial. And that’s primarily a U.

S. Impact, I would say. The second element, I would say, is diabetes. So diabetes grew very strongly outside of The U. S.

We were up eleven percent in the international market. The U. S. Was a bit slower, and that’s mostly a product topic. So we have the demand for Simplera, but the ramp up is only starting, And that’s impacting The U.

S. As well. And so as this ramp up occurs, we’ll see those things start kicking in The U. S. And adjust changing the profile that we mentioned between U.

S. And international markets. So positive going forward in The U. S.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yes. And CAS, like we showed in the earnings presentation, that’s going to continue to accelerate. As you highlighted, Travis, we’re getting the capital systems out there. The utilization is off the charts high. Everyone’s, you know, every everyone’s excited about the catheters we have.

They’re also you know, the the catheters that are coming, you know, Sphere three sixty in in the single shot space. So it’s great. I was just in Japan the the week before last. I was there for fifty years of Medtronic in Japan. I spent a lot of time with physicians, a lot of conversations on CAS.

And there, we’re the number one market share. And Affair is approved but not even launched there. This is on Pulse Select. And I know our competitor highlighted, you know, that they felt they were the number one, talked about how many cases they’ve done. We’ve done meaningfully more in Japan and I know we’re we’re the number one there.

And I asked, you know, what was probing as to why and, you know, they talked about the precision of Pulse Select and that, really the safety profile of our catheters, both the publicized safety of Pulse Select, but also Afera, you know, in our IDE trials. And then they did their own the largest centers there in Japan did their own IDE their own trials. And that safety profile came through. And I think that safety message, obviously, it means a lot in Japan. They really prioritize it.

But I think that as PFA grows and becomes more ubiquitous, I think that’s going to become a bigger kind of driver here in The US as well, that plays to our favor. So I think CAS is in a really good spot to continue to accelerate. And not only did it grow year over year, but it accelerated meaningfully sequentially. We saw strong sequential growth in cast, especially in Afera, which was, I think, like, near 60% sequential. So, I mean, any way you slice it, our CAS business, you know, technology to commercial execution, geographic expansion, safety profile data, physician experience, etcetera, is doing really well.

And Jeff,

Thierry Peyton, Chief Financial Officer, Medtronic: as you mentioned, the sequential growth is going to continue, right? And you saw that on the chart. We’re going to have both higher growth rate in Q2 than we did in Q1 in CAS. And we’re also going to have an absolute value significant sequential growth between the first quarter and the second quarter.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: All right. Thanks, Travis. Appreciate the one question. Next, we’ll go to Larry Biegelsen at Wells Fargo Securities. Larry, please go ahead.

Larry Biegelsen, Analyst, Wells Fargo Securities: New board committees, you know, one focused on growth, one focused on operations. What can these committees do that you couldn’t do before? You know, what would success look like, and how long before investors start to see an impact? Thank you.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yeah. Thanks, Larry. I mean, look, the two committees, I think like I mentioned in the comp, they’re gonna provide focus to support management. You know, I think particularly, like, the the where there’s the two committee, one on growth, one on operational, you know, operational performance, think, you know, margins, think continued focus on our supply chain. You know, one thing they’re gonna do a couple of things.

One, we’re bringing on these two new directors with deep med tech experience. You know, that’ll be a strong voice on the board, you know, I believe. We had med tech experience in the past and recently not as much. And so bringing in, you know, John and Bill will help a lot and will be on those two committees. The other thing is just the frequency.

So we’ve rearranged our committees. We didn’t just add two committees. We were we’re we’re gonna rearrange them so that we keep the same amount of committees, and these will be very focused on those two topics. And the amount of the intervals with management will be higher. It’ll be, I think, quite a bit higher than we’ve had in the past, a lot of off cycle discussions that will help drive this.

So that’s what I think. It’s the focus, it’s the interval, and it’s of touch points with management, and I think the med tech voice on those two committees.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Thank you very much. Thanks, Larry. Next question, we’ll take from Mike Kratky at Leerink Partners. Mike, please go ahead.

Mike Kratky, Analyst, Leerink Partners: Hi, everyone. Thanks very much for taking our question. Maybe just going back to the CAS business. So during your last call, you talked about CAS growth accelerating from 30%. You put up another great quarter of nearly 50%, expecting that to accelerate again.

So I’m curious in terms of the ramp that you’ve seen, is that $2,000,000,000 that you’ve talked about in annual CAS sales now squarely on the table for fiscal twenty six? Or what reservations would you have about committing to that?

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yes. No. Thanks for the question, Mike. When I said that, it’s I I keep we’re sticking to that. Nothing’s changed.

And I said it’s near term. You know, I think getting it in fiscal and it’s it’s off just to be clear, it’s it’s it’s another billion on top of our f y twenty five base. Right? So that’s what we’re anchored on. Sticking to that, I said near term.

So near term, you know, it could be f y twenty six might you know, I think it’ll go into f y twenty seven, but it won’t be far. So that’s on track. Like I said, accelerating sequentially as well and things are looking good. So no change there.

Mike Kratky, Analyst, Leerink Partners: Got it. Thanks very much.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Thanks, Mike. We’ll take the next question from Robbie Marcus at JPMorgan. Robbie, please go ahead.

Robbie Marcus, Analyst, JPMorgan: Great. Thanks a lot for taking the question. I wanted to follow-up on Larry’s question on the new directors and the formation of the committee. Jeff, Thierry, maybe you could give us a little more besides more touch points and communication, is this something where maybe the size of the company, the dividend, the capital allocation might be up for a discussion, how to create more EPS growth. I’m just trying to understand how much of this is more a continuation, Jeff of your strategy since you became CEO and I know you’ve talked a lot about portfolio optimization versus maybe evaluating something more of a wholesale change.

Thanks a lot.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yeah. Look, Robbie, I’d say, first of all, I think we’re entering, like I said in the call, a new chapter here for the company. I mean, when I came in, immediate was met with a a couple of challenges that we had to work our way through. Some, you know, of our own making, some market like VBP and things like that. You know, but we’re, you know, we’ve got a stable foundation.

We’ve worked through that. Our growth drivers are kicking in, and we’re gonna execute to that. Right? And and you’ll see this growth inflection in the back half of the year. But on top of that, I think we we feel confident.

Our board feels confident, and we this is something that was in place before we started engaging with Elliott, that we can turn the page to a a new chapter and be more aggressive on some some of these other drivers, right, that that we talked about. And these are the same things that Elliot has talked to us about is whether it be it’s all about value creation and some bold decisions around a couple of areas. You know, one is more m and a. Okay? You know, the Afera deal is looking great.

And like I said, we we feel like the team has the bandwidth to to integrate more such deals like that, not necessarily in AFib, but, across the company in these high growth areas. More M and A, a reinvigorated laser focus on the portfolio to reorient the whole portfolio between M and A and any kind of portfolio moves towards higher growth. Increase our WAMGR. Diabetes deal is a good proof point, but there’s other opportunities we can look at here. So that’s one big area.

And then the second is investing more in the company. So we’ve talked about capital allocation within the company, where we’re investing our r and d and our and our g and a, where where you know, our growth oriented g and a, where’s that going? But making sure we’re investing more in the company. Are we are we investing enough behind these big growth drivers? We think no.

We’d want to invest more. You see it in our r and d this quarter growing almost 8%. You know, we’d like to keep that trend going, invest more behind these growth drivers because they’re secular growth drivers. And talking to Elliot, they called them transformational growth drivers that we haven’t seen in decades. That’s their words, not mine.

So these are the themes, reorienting the portfolio for even higher growth that’s durable and and then, you know, reinvesting more behind our growth drivers. We’ve got the confidence. We’ve got the stable operational base to do this, and we can work on those things as these other growth drivers that we’ve been working on for the past couple years are are taking us you know, are accelerating our growth. So we can do both of these at once and that these committees are gonna help with that. And and super excited to have, you know, both John and and Bill on the board.

We talked about, you know, their med tech background, but specifically, you know, operators, strong financial acumen, experienced in doing portfolio moves, M and A. And they’re just a good fit. They went through our normal process through our nominating corporate governance committee. It was unanimous that everyone felt it was a good fit. We want them.

They want us. And I think they’re going to do a great job not just supporting management, but also representing all of our shareholders. So that’s that’s how I’d answer that question, Robbie. It’s it’s all about value creation. We’re gonna do what it takes to to get there.

There’s a big opportunity in front of us and it’s about capitalizing on this opportunity and accelerating it.

Robbie Marcus, Analyst, JPMorgan: Great. Thanks, Jeff. Can’t wait to see what comes. Appreciate it.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Thanks, Robbie. Appreciate the question. Next, we’ll go to the line of Matt Miksic at Barclays. Matt, please go ahead.

Matt Miksic, Analyst, Barclays: Hey, thanks so much for taking the question. And congrats on on some of the progress here that you’re making in these major growth drivers. And so on that on that subject, you know, you’ve been investing in, you know, the groundwork for these major growth drivers now for several years, you know, diabetes, ablation, RDN, and and they’re just starting to to really come through. So, you know, we get excited. I think everyone gets, you know, excited about seeing the growth come through and hearing about rates like 50% growth in in, in cardiac ablation.

But, it’d be super helpful if you could try to square, you know, not to temper the enthusiasm because they’re they’re great programs, but try to square, you know, what these can mean on an annual basis, to to sort of overall Medtronic portfolio growth just because I think the perception becomes you know, we’re accelerating growth, which means we’re not gonna do five. Maybe we’ll do 6% growth or something like that, which which, to take that off the list for the long term. But but, but maybe help us, you know, walk through a cadence of, say, 25 or 50 basis points, you know, over the next twelve months? Is it is it another 25 or 50 basis points maybe in ’27? Just some way of gauging what this means to overall portfolio growth would be would be super helpful.

Thanks.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Okay, Mike. Thierry, do you want to take that one?

Thierry Peyton, Chief Financial Officer, Medtronic: I guess I’ll take a shot at it. Jeff, you can comment. So first, you might have seen in the announcement that we’ll do an Investor Day sometime in mid-twenty six to take you through sort of the next step in our financial profile. So I’m not going to give you very specific targets until we get to that point because that will be the whole purpose of that discussion. When we have that discussion, what we’ll do is we will show you where the company is going.

We will show you the steps to get there and we will show you what it means from a financial profile perspective, new sort of framework, financially speaking. And we will give you the indicators that you can use to see that we are tracking towards that path. That being said, to be a little more short term, look, Jeff mentioned the magnitude of the opportunity that we have got in CAST. So we’re talking $1,000,000,000 of incremental revenue over the 25 run rate within a relatively short timeframe, right? So this, you could see the type of impact we’re going to have there.

On Ardian, it is also a secular change for us and a massive transformation in terms of run rate. And you can see the size of the opportunity that this represents. So these two things alone are going to have a pretty significant impact on our growth rates. And then Jeff mentioned all the other elements such as Tibio and Hugo that are going to kick in, etcetera. So it’s very clear that we are talking macro level impacts, growth opportunities.

And to be clear, we’re not giving up on the rest of the business, right? So we’ve made the underlying changes to make them run smoother. We’re addressing with product and innovation some of the businesses that have been slower growth businesses or franchises for us in the past. So you should see these large opportunities as being incremental and that’s what we’re targeting. For the exact quantification, I’m afraid you’re going to have to wait a little bit.

You’ll start seeing the signs in the second half and then we’ll show the new framework when we talk to you on the 2026.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yes. No, the only thing I’d add to that is, why now? We’ve got this growth coming, right? You have this inflection in the back half of the year and very tangible new product innovation coming. And even from like this quarter and that you have some businesses that were growing below trend that also have, you know, nice, you know, products coming or lapping an issue like VBP and neurovascular that also contributes.

So it leads to a nice back half growth that will continue. And that higher growth allows us gives us more just through some natural leverage in our cost control in our in our operational efficiencies. It gives us more oxygen to reinvest, which allows us to do more innovations. There was that chart of that that cycle. And I I the only thing I I think is missing from there is portfolio, right?

So more growth leads to more oxygen, which leads to more investment, which leads to more innovation and more growth. And then you’ve got the portfolio in there. So I do think it creates opportunities for a different algorithm here. But that’s something we’re not going to really talk too much about until we get to that Investor Day. I’d like to think there’ll be some milestones along the way, but you know, the broader strategy and algorithm, all that, we’ll talk about on that Investor Day.

Thierry Peyton, Chief Financial Officer, Medtronic: If I can just add one comment, Jeff, on that. You know, we’re talking about reinvesting more, but I want to be clear that we’re not talking reinvesting to the detriment of EPS, So it has to be and. So we’re very clear on the fact that the growth will allow us to invest more while continuing to generate leverage statement and improving EPS, right? I just want to be clear about that.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yes. Good point.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Okay. Thanks, Matt. Next, we’ll go to the line of Anthony Petrone at Mizuho. Anthony, please go ahead.

Anthony Petrone, Analyst, Mizuho: Great. And, congratulations on the announcements, this morning. And maybe I’ll zone in on one of the growth initiatives, is renal denervation. We’re we’re we’re looking at the targeted, date of October 8 for the NCD. So so maybe just frame for us what you would view as a as a, you know, the best case outcome in terms of the targeted population in uncontrolled hypertension.

And when you sort of think about this new structure growth initiatives, you know, where would you stack rank renal denervation on transforming the growth profile of this company? You know, can this be a multibillion dollar product category over the next few years? Thanks.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yeah. Thanks for the question, Anthony. Look. Yeah. First of all, let’s you know, there was a an update on an Ardian this quarter, which we I don’t think we talked about it.

We didn’t talk about the commentary, but we did get through the comment period, that thirty day comment period ended with CMS. There was, I think, a record, I’m told from our reimbursement folks, record number of comments, overwhelmingly positive in support of Ardian and the guideline and the kind of the CMS, how they framed reimbursement and what’s required. And that, like we said on our last call, kind of a best, know, is a very good case for us that opens up this market. In addition to that, you’re seeing physician societies. We already saw it in Europe a few months ago, now in The US incorporating renal denervation and our, you know, I guess, saying our product name here Simplicity, you’re going hear a lot more about that, into the care pathway.

So all these puzzle pieces that we’ve been working on for so long breakthrough FDA device designation, you know, a nice indication for this. The CMS proposed reimbursement, the comments. Now you’re seeing the physician societies incorporate simplicity into, you know, the care pathways, how you take care of these patients. Strong demand from hospitals to say, Okay, we need to get serious about this. How do we we need to build these care pathways.

We’ve put out we’ve deployed a lot of market development specialists to support them in this, training of the physicians, although that’s not a huge burden. These a lot of interventional cardiology community, this is not a big stretch for them. So that’s not a huge burden, like something completely new. They got the catheter skills. And so all the dominoes are falling, the puzzle piece is snapping into place, that this is going to be a massive market.

Now, you know, we’re looking at CAS right now. It’s very tangible. You see the transition from, you know, you know, from drugs to to ablation and within ablation from one technology or PFA. And we’ve got a great technology there. It’s growing like crazy.

It’s very tangible. I still think Ardene has a chance to even be bigger. The patient population is massive. We’ve talked about how many? 100,000,000 people in The US, one hundred to two hundred people, one million people in The US that have hypertension.

And of those is that right, about one hundred million?

Larry Biegelsen, Analyst, Wells Fargo Securities: Yes. Got this eighteen

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: I’ll chime in, Jeff. Eighteen million that are uncontrolled hypertension. And so it’s a massive population.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: And one in four of people with hypertension have, you know, it’s a huge number that’s uncontrolled. And so we think this is going to be a could be the biggest thing that we ever do. And this is one of those areas that we talked about is investing behind this, to really make this market, you know, develop and grow and be a driver for us and create a moat around our franchise, our Simplicity franchise, to protect it against competitors. Got already our next generation of catheters ready to go. We’ve got new clinical trials ablating different places that we think that in the early work meaningfully helps the blood pressure reduction.

So there’s a lot of work going on here and just really pleased with the way it’s all coming together. Else? Appreciate that.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Great. Thanks, Anthony. Next, we’ll go to the line of Josh Jennings at TD Securities. Josh, please go ahead.

Josh Jennings, Analyst, TD Securities: Hi. Good morning. Thanks for taking the question. I changed that picture updated. Sorry about that.

I wanted to just check back in for the increased focus on the diabetes franchise with the IPO split, separation strategy. Just in The U. S, it sounds like that the slowdown may have been driven by just patients and physicians waiting for next generation CGM and and instinct, the collaboration with Abbott. Multi part question, but just first, just wanted to check and make sure there’s there hadn’t been disruption that’s leading to a slowdown. And then second, just to set expectations in terms of how we on the sell side investors should be thinking about the ramp from here in that US diabetes business.

And and then lastly, just what’s left for the, the approval, and and launch of of for of instinct in in, in the integration with seven eighty g? Sorry. Three parter there, but, hope you can you got all that.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Okay. Well, it’s to the three parter, you know, and change the picture if you if you want. But why don’t for why don’t I do two things here? I’ll have Thierry update you just on, you know, the deal. You know, it is on track and let him talk about that.

And we will bring Q on to talk about the business specifics. So Thierry, do want to update us on the deal?

Thierry Peyton, Chief Financial Officer, Medtronic: Just on the deal, would say the process is perfectly on track. So there’s really two sides. One is the operational separation of of the business and the other is the transaction itself. On both fronts, the teams are making progress exactly in the way we anticipated. The first investor engagements have been very, very encouraging.

So look, we said three months ago, we thought we’d complete the separation within eighteen months. It’s three months later. Now it feels like fifteen months. So everything on track. That’s all I would say on this one, Jeff.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Okay. Know, Q, do you want to answer the business questions that Josh had?

Jeff Martha, Chairman and Chief Executive Officer, Medtronic0: Yes. Jeff. Thanks. Josh, I think you got it right. It’s really a matter of timing in the first half.

We’re really excited about Simplera, and you can see that we’re achieving double digit growth in the international markets where Sinclera has been launched. And in The U. S. The demand is absolutely there. So we have this dynamic where patients are waiting for the new CGMs, And to give you a sense of how we’re ramping up production, we’re going to be producing double what we made in Q1 and in the second half double what we’re making in the first half.

So production is ramping up really nicely. And then in parallel to that, the Abbott based sensor Instinct, we expect to launch in the coming months, so not too far behind Sinclaira. And to put it in context, it’s actually a very big moment for us because we’re now going to have two competitive sensors on the market giving patients choice, significant improvements in form factor and days of wear. And so really it’s a matter of timing and why I’m actually extremely confident that we’ll see growth acceleration in the second half. And then you asked about, you know, what’s left to get instinct over the line.

We told you that we submitted for ACE and IAGC back in April. We got ACE approved in July. And so our expectation is that we’ll be in a very strong position to launch in the coming months.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yeah. Look, I’d summarize it. There’s a however you want to phrase it, a super cycle of innovation here that diabetes has. It’s on the very front end of, and we think this transaction’s going to be a value creating, significant value creating event for shareholders. But meantime, you know, we still, Medtronic is the owner of this company for, you know, a year plus, and and we’re very focused on it.

This is an important part of the company, and, you know, we’re committed to making this this this this capitalize on this cycle of innovation that we’ve been building towards and this making this transaction a a meaningful value creator for investors.

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Great. Thanks, Josh. We’ll take two more questions here before we wrap up. So we’ll go to the line of Matt O’Brien at Piper Sandler. Matt, please go ahead.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic1: Good morning. Thanks for taking the question. I’d love to ask a little more about RDN, but I think the other thing to think about here is the overall business as you spin off diabetes. You’ve got half the business that’s doing really well, growing very quickly, but another half that’s a little softer, not growing quite as quickly, maybe some structural headwinds. You do have a couple of new products in tibial and robotics that may be able to help kind of some of these softer areas.

But are there other products on organic side of things that can help kind of bring some of these softer businesses up the other half of the business that’s doing so well? Or do we need to wait for more inorganic additions to really help with that side of the business maybe post the Elliott contributions? Thanks so much.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Yeah. Thanks, Matt. No. Look, the short answer to your question is some of the businesses that came in below trend or lower growth in the portfolio, they have very specific growth accelerators already organic. We talked about neurovascular, for example.

That’s been a good grower for us in the past, and it has to get through a major, probably the biggest VBP impact we’ve had on any one business. Neurovascular for us is huge in China. And so that is we’ve got to we’re moving through that. It also had a recall, which we’re not technically lapping that, but the replacement product now is ramping up. So that’s going to accelerate.

And then I mentioned through the Contigo partnership some products that we’ll be putting on our neurovascular and our peripheral vascular bag I’ll come to PV in a second that will help with its growth. And then finally we’ve got some hemorrhagic products in neurovascular. So neurovascular, you’re going to see a meaningful acceleration. We talked about pelvic health and I think this is an underappreciated one. This overactive bladder is an under it’s a huge market.

It’s millions of patients. And, you know, the idea of going from basically an implantable device in your upper buttocks, the sacral nerve modulation, to something that’s above your fascia on the ankle. It’s not quite a wearable, but it’s pretty close to wearable is really, you know, is really going to open up that market. We’ll take market share, which will be fun. But but the bigger thing, we’re going grow this market like crazy.

So that’s another one. And, you know, neuroscience is is is over the years been a consistent performer for us and it’s very well positioned competitively and it will be that way. And I think these two will help accelerate it. Peripheral vascular as well. Again, the Contigo Transactin, we put those carotid stenting products in their bag.

They have some other organic products coming in aspiration, Liverant. And so there’s another example as well. Those are some of the slower. And then we talked to you about diabetes, you know. And then the other two things are big, you know, look, we’ve talked about there are those headwinds.

They’re stable but consistent headwinds that we’re dealing with there. Then in our other two big franchises, spine and CRM, we’re in great shape. Know, spine had a mid single digit revenue overall. And it was like 4.5%. I think we had over 8% in capital worldwide.

I know our competitor, you know, said some of their capital was lower, a little lower or a lot lower. And there was concerns about capital in that area. Now our capital is growing like crazy, you know, globally over 8%, 13% in large capital. We got a motor on that spine business that’s going to be durable. And then Cardiac Rhythm, you know, it some tougher comps to deal with, but there’s a lot of innovation there.

EVICD growing well, first of all, leadless is still growing over 14% this quarter. It’s over a decade and still growing in the teens even with competition, 14% this last quarter. You know, you’ve got EVICD growing over 80%. And then our our conduction system pacing lead was 20 some percent, 21%, I think. And then we’ve got a new high power conduction system lead coming, Omnisecure.

So I think that business is in a great shape. So you look around the portfolio, you see major growth drivers and you see some, I’ll call them singles or doubles coming in some of these lower growth businesses, except for pelvic health, that’s more than a single or that’s a big one that are going to get the rest of the company up and really support this back half ramp and keep it durable. Did I miss anything?

Thierry Peyton, Chief Financial Officer, Medtronic: No, I think that was very comprehensive. Thanks,

Ryan Weisvening, Vice President and Head of Investor Relations, Medtronic: Matt. Thanks, Matt. We’ll take one more question. We’ll go to the line of Joanne Wuensch at Citi. Joanne, please go ahead with your question.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic2: Thank you and good morning. And I like the new background look. At SRS earlier this summer, Hugo had a really significant showcasing. And I’m curious what are your thoughts on what you’ve learned in the European market and how that could translate to when it comes into The U. S.

Market? And I’m also curious if you can give us any sort of metrics on revenue, robots placed, anything that sort of help ground us to the progress that’s being made in that segment. Thank you.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Thanks, Trio. Think we’ll call Mike Manera to answer those questions, but I’ll start by saying, you know, Hugo continues to make, you know, progress. This is, you know, important program for us. We’re counting on it being one of our growth drivers, particularly when it gets into The U. S.

We talked about in the back half of the year. But I’ll turn it over to Mike, to answer those specific questions. Mike?

Jeff Martha, Chairman and Chief Executive Officer, Medtronic3: Yeah. Thanks, Jeff, and thanks, Joanne. So maybe first ask the answer the questions around what we’ve learned in the international markets. I think importantly, we’ve learned that we have a form factor that’s been received very well, particularly the open console, the modular design, which is now, you know, really starting to play out in a very meaningful way. In general surgery, we’re seeing that general surgery applications are, really a place where where the modularity of this system really shines because you can take a true, lap like approach.

We’re learning that partnership really matters. We’re not really selling you know, we’re selling robots, and the performance of the robot, obviously, is critically important. But we’re really you know, we’re building partnerships. And so training, education, how we surround the robot, how we come to customers as a full surgical business, these are all critical lessons that, that we’ve learned so far. And also lessons that we’re borrowing from our spine business, I think Jeff just talked through, that there’s really a whole ecosystem play here that we’re thinking about then as we come to The U.

S. Market. From a a performance perspective, you know, we’re now in over 30 countries in markets around the globe. We’ve logged tens of thousands of procedures, and we’re seeing significant double digit growth in our in our current accounts on a year on year basis. So very good progress there, and and we’re tracking, you know, that momentum very carefully because how those accounts perform on a year on year basis, obviously, is a good indicator for, you know, for what we should expect moving forward.

As you know, we filed and as we talked about at SRS, Joanne, I think you were there. We filed for FDA approval for our urology study or urology indication rather here this year. We’re progressing well in talks with with FDA. We’ve we’re preparing to launch or rather submit hernia and GYN shortly thereafter. Those are all submitted by very large datasets that we’re presenting at major conferences.

So, you know, we presented urology at AUA, a very large dataset at the European Urology Society, the GYN data at at SRS. We’re presenting the hernia enabled hernia, which will be the data to support our, US approval at, at the American Hernia Society here, coming up in September. So we’re taking a very, you know, sort of forward leaning public approach to really displaying the safety and efficacy of the system so that, you know, customers and and the community can see what that looks like, and we’re shortly preparing to enroll our first patient in our GYN onc study so that we can pursue that indication as well. So there’s a whole series of progress that’s being made here in addition to our digital ecosystem, which grew significantly last year both in lap and robotics, including in competitive systems and is poised to more than double again this year. So I think Jeff said it, we are making very good progress.

We’ve seen now, you know, the performance of the system. We’ve learned from that. We’ve seen how critical it is to really come in in as full partners. And, you know, we’re expanding the number of countries and significantly increasing the number of procedures on a on a quarter by quarter basis. Thanks for the question.

Jeff Martha, Chairman and Chief Executive Officer, Medtronic: Okay. Thank you, Mike, and thanks, Joanne, for the question. So I think that we’re gonna bring the call to a close here. You know, first, I wanna thank all the analysts for their questions and all the support. Thank you for joining us today.

I’d like to announce our next our q two earnings call is going to be broadcast the week of thanksgiving, actually, Tuesday, November 18. Week before. The week before. I’m sorry. The week before thanksgiving.

Tuesday, November 18, that’s the week before thanksgiving. We’ll update you on our our progress. So with that, I’ll bring the call to a close. And thanks for joining us, and have a great day.

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